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Chapter 11 Notes

Chapter 11 discusses the taxation of corporations, detailing income sources, deductions, and taxable income calculations. It outlines federal and provincial tax rates, including specific deductions for charitable donations and capital losses. The chapter also categorizes corporations into public, private, and Canadian-controlled private corporations (CCPC), explaining their respective tax implications and dividend treatment.

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21 views4 pages

Chapter 11 Notes

Chapter 11 discusses the taxation of corporations, detailing income sources, deductions, and taxable income calculations. It outlines federal and provincial tax rates, including specific deductions for charitable donations and capital losses. The chapter also categorizes corporations into public, private, and Canadian-controlled private corporations (CCPC), explaining their respective tax implications and dividend treatment.

Uploaded by

Siopao Jolavidez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Chapter 11 - Corporation

Income from all sources


(Employment, Property, Business, x
3a Other Sources)

Net taxable capital gain (Taxable


capital gain less allowable capital x
3b loss)
3c Other deductions (x)
3d Losses (x)
Net Income x

(Net cap loss C/F, Non cap loss C/F, (x)


Div C deduction div rec)
Taxable Income x

Part I Federal tax


Basic Fed Tax (38% TI) x
Abatement (10% TI) (x)
Add'l. refundable tax (10 2/3% of x
AII)
Add'l. tax on Personal Service x
Business Income (5% on PSB)

(x)

Small Business Deduction (19%)

(x)
Manufacturing & Processing
Deduction (13% Mftg & Processing
Profits)
General rate deduction (13% TI less (x)
Investment Income)
x
Total Part I Federal tax
x
Provincial tax Alberta 12%; Nova Scotia 16%
Total Fed & Provincial tax x

Div C deduction Corporation


1. Charitable donation
2. Capital loss - carried forward
3. Non-capital loss - carried forward
-carried back 3 years
-carried forward 20 years
4. Dividend received from taxable canadian corp - if included in 3a deduct in Div C
-inter corporate dividend - not taxed
-no gross up for corporatios - included NI, excluded TI
-Dividend from affiliated foreign entity - 10% or more - included
-Dividend from non-affiliated foreign entity - not Div. C deduction

3 types
1. Public resident/incorporated in Canada
shares are traded in stock exchange

2. Private resident in Canada; not a public corp or controlled by public corp

3. CCPC resident in Canada


not a public corp
non controlled by non-residents of Canada

Aggregate Investment Income interest, rent, royalties, net taxable cap gain (dividend not included)

CCPC 1st 500k - low rate


CCPC above 500k - GRIP - general rate income pool

Multi-provincial tax
Sal & wages Wages paid in province
x%
Total wages paid by corp
Sales Sales in province
x%
Total sales of corp
Total (sum / 2) x%
CCPC only on PSB

least of:
1. Annual Business limit - 500000
2. Annual Business income - x
3. TI - AAII (Aggregate Adjustment
Investment Income)
rp - if included in 3a deduct in Div C

r more - included
ot Div. C deduction

led by public corp

vidend not included)

any balance left in GRIP - company can declare eligible dividend


non-eligible dividend - CCPC only
Public Company - any dividend declared - eligible

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